Recent times have seen various changes in Russia’s policies and standings regarding cryptocurrency and other digital assets, including the plans to legalize cryptocurrency mining.
On 12th October, a report was released which signified the rising usage of stablecoins in Russia by the citizens following the invasion of Ukraine by Russia. The ongoing tension between the nations has given rise to numerous sanctions and affected inflation. Recently, Russia allowed cross-border payments, but the EU banned European wallets from being involved in crypto payments with Russia.
The published report revealed that the usage of stablecoins in Russia had seen a significant rise from 42% in January to 67% in March, and the trend has continued since then. It also suggested that a part of the rise of stablecoins usage is probably due to the country’s citizens trading the Ruble for stablecoins. In contrast, the other reason could be businesses using cryptocurrency for international transactions. This trade of Rubles for stablecoins by the citizens primarily protects the value of an individual’s assets in between the constant state of war and rising inflation.
As per the report, Eastern Europe had the highest share of risk in crypto activities compared to other regions worldwide over the last year. The report defined the risk as transactions involving addresses with risky entities like exchanges with low to no KYC requirements and illicit activity as transactions associated with a criminal entity. The report’s statistics ranked Eastern Europe as having the highest risk, at 18.2% of cryptocurrency-related activities were termed illicit or risky. Eastern Asia followed Eastern Europe with 15% and Sub-Saharan at the third position.
The EU’s recent ban on Russian payments to European wallets is also expected to increase the regional risk statistics further as it would urge people to use risky exchanges with no KYC requirements to get around the sanctions. The report further highlighted the need for efficient talks and actions to strengthen the sanctions. It also praised the positive role the cryptocurrency has played in facilitating donations to Ukraine, putting the value at $65 million currently.
In September, The Russian government also announced their digital Ruble in partnership with China as a measure to end the long-time dominance of the US in the industry and is going to establish Crypto guidelines by December for efficient regulation.